Tracker aims to collar the future of e-commerce

By Dan KaufmanJuly 2 2002
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A casino's wardrobe is the last place you'd expect to find the future of e-commerce
but at Sydney's Star City casino that's exactly where it might be. Sewn into
the waistband, shirt-tail or collar of each employee's uniform is a tiny radio
frequency identification (RFID) chip that allows management to track the uniform
from the moment it is issued, regardless of whether it is being cleaned, worn
by an on-duty worker or taken home as a souvenir.

The technology behind this is called silent commerce, a term that was first
coined by technology services and management group Accenture a few years back.

The idea is to embed products and inventory with devices such as radio frequency
identification tags, sensors and global positioning systems to allow them to
autonomously communicate with tracking systems.

"Silent commerce can often take place without human interaction because it's
enabled to give everyday objects reason; it's about embedding intelligence into
objects and using that intelligence to do things to drive commerce," says Sanjay
Gopal, a partner in the communications and high-tech industry group at Accenture.

One of the main applications for it lies in supply-chain management as it can
help companies identify or track products from the manufacturer to the consumer.
However, Accenture believes it can also be used to find stolen products, act
as an anti-counterfeiting measure by identifying products, automatically monitor
inventory, in addition to "interacting" with customers to report back information
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"It's a simple application but the concept is pretty innovative," says Star
City chief information officer Mark Waugh, who adds that the casino has received
significant benefits from using silent commerce, including fewer lost garments
and reduced labour costs.

Star City is at present the only Australian company to have implemented silent
commerce, although Gopal claims some government departments have expressed interest.

"Silent commerce can help in a number of ways," he says. "You ask yourself
questions such as `is my organisation suffering from counterfeiting, theft and
diversion of products', and government organisations are very keen on preventing
those problems."

Silent commerce hasn't taken off overseas either, with Accenture admitting
the response from governments and businesses has largely been limited to trials.

In the US, though, clothing chain Gap is attaching intelligent tags to garments
during their manufacture so that the company can obtain dynamic information
about each item all along the supply chain. In Barcelona, rubbish bins are embedded
with tiny chips that communicate how full the can is so that contractors only
have to stop for cans that need to be emptied.

Accenture believes it is only a matter of time before silent commerce is embraced,
and the company cites a study it conducted showing that 39 per cent of businesses
worldwide agreed their industry would benefit from silent commerce and 19 per
cent of those surveyed claimed they would adopt it over the next three years.

Not everyone, however, shares Accenture's confidence.

"It would deliver a lot of value to all the players in the supply chain if
it actually worked, but I think it's really an academic concept at this point,
I don't think it's really do-able," says Mark Cochrane, a Hong Kong-based analyst
at Gartner G2. "What it reminds me of is a few years ago the term `seamless
integration' was very popular in the supply-chain management field - everyone
was talking about information flowing from one end of the supply chain to the
other . . . The majority of supply chains in Asia are nowhere near this kind
of concept."

Cochrane says silent commerce also raises some ethical issues. "There are
privacy concerns as well - if it helps manufacturers and retailers see how and
where the goods are being used, you get into privacy issues such as does the
consumer really want you to know how they're using those goods?" he says.